CVS Health Misclassified Utilization Management Workers as Exempt from Overtime Pay, Lawsuit Alleges

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A proposed collective action claims CVS Health has deprived utilization management and review nurses of proper wages by misclassifying them as exempt from overtime pay prior to April 2023.

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The 13-page lawsuit explains that the federal Fair Labor Standards Act (FLSA) requires employers to pay non-exempt employees time-and-a-half-wages for every hour worked over 40 per week. Although CVS Health rightfully reclassified its utilization management and review nurses as non-OT-exempt in April of this year, the case alleges the company willfully disregarded its obligation to pay the employees proper overtime wages for before they were reclassified.

According to the complaint, CVS Health employs nurses to review medical authorization requests submitted by healthcare providers for insurance coverage and payment purposes. The nurses’ primary duty is to enter “easily-identifiable” data from electronic medical records into an online application that determines if an authorization request meets certain “pre-determined” criteria for insurance coverage, the filing explains.

The case argues that these duties are considered non-exempt work, given that the nurses do not have the authority to override decisions generated by the online application, and they do not directly engage with patients, supply medical care or recommendations or negotiate with providers.

The plaintiffs, two CVS Health utilization management nurse consultants, claim that until April 2023, they routinely worked 45 to 60 hours per week to meet the company’s productivity standards. In return for working additional time outside of their typical shifts, the plaintiffs say they received lump sum payments that failed to account for the number of hours they actually worked.

The plaintiffs and similarly situated employees were informed in March 2023 that they were being reclassified as hourly, non-exempt employees but were expected to perform the same job duties, the complaint claims. Per the suit, CVS Health failed to pay utilization management and review nurses overtime wages until at least April 15, 2023, and has yet to compensate employees for all overtime wages owed prior to the reclassification.

“As a leading healthcare and publicly traded company with access to an extremely large, sophisticated, and well-resourced human resources department, and an army of legal counselors, CVS Health had no reasonable basis to believe that Plaintiffs and the Collective Members were exempt from the requirements of the FLSA and state laws,” the case reads. “CVS Health either knew or acted with reckless disregard of clearly applicable wage and hour provisions in failing to pay overtime compensation to Plaintiffs and Collective Members prior to April 15, 2023.”

The filing notes that Aetna, Inc., with whom CVS Health merged in 2018, was hit with a proposed collective action in July 2019 over claims that the healthcare company robbed utilization review and care coordination workers of proper overtime wages by misclassifying them as exempt employees.

The lawsuit looks to represent anyone who worked for CVS Health in utilization management roles, including utilization management nurse consultants and similarly titled positions, during the past three years in the United States and who were not paid overtime compensation when they worked over 40 hours in a workweek.

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